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CBSE Class 12 Business Studies 2025 All Sets Solved Paper
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Question : 9 of 20
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If an investor wishes to buy or sell any security, he/she has to first approach a registered broker or sub-broker and enter into an agreement with him. An investor has to sign a broker-client agreement and a client registration form before placing an order to buy or sell securities. Thereafter, the investor has to open a 'Demat' account or 'Beneficial owner' account with a depository participant for holding and transferring securities in the demat form and a bank account for cash transactions in the securities market. The first two steps of "Trading and Settlement procedure' in stock market have been discussed in the above lines.
Place the next four steps in the correct order:
(i) The broker will then go online and connect to the main stock exchange and match the share and best price available.
(ii) After the trade has been executed, within 24 hours the broker issues a contract note.
(iii) The investor then places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and the price at which the shares should be bought or sold.
(iv) When the shares can be bought or sold at the price mentioned, it will be communicated to the broker's terminal and the order will be executed electronically.
Choose the correct option from the following:
Place the next four steps in the correct order:
(i) The broker will then go online and connect to the main stock exchange and match the share and best price available.
(ii) After the trade has been executed, within 24 hours the broker issues a contract note.
(iii) The investor then places an order with the broker to buy or sell shares. Clear instructions have to be given about the number of shares and the price at which the shares should be bought or sold.
(iv) When the shares can be bought or sold at the price mentioned, it will be communicated to the broker's terminal and the order will be executed electronically.
Choose the correct option from the following:
Solution:
To determine the correct order of the steps in the trading and settlement procedure, we need to analyze the sequence of actions taken by the investor and the broker.
The steps are as follows:
1. The investor places an order with the broker (step iii).
2. The broker connects to the stock exchange to find the best price (step i).
3. The order is executed electronically when the shares can be bought or sold at the specified price (step iv).
4. After the trade is executed, the broker issues a contract note (step ii).
Therefore, the correct order is (iii), (i), (iv), (ii).
The steps are as follows:
1. The investor places an order with the broker (step iii).
2. The broker connects to the stock exchange to find the best price (step i).
3. The order is executed electronically when the shares can be bought or sold at the specified price (step iv).
4. After the trade is executed, the broker issues a contract note (step ii).
Therefore, the correct order is (iii), (i), (iv), (ii).
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